Spencer’s Retail, part of the RP-Sanjiv Goenka Group, continues to witness strong momentum in the omnichannel vertical. The segment’s gross merchandising value saw a 2.4x growth YoY for the first six months of the fiscal, which reduced losses. The coverage of the omnichannel vertical includes general merchandise, food, grocery, apparel, fresh items and liquor.

ORIPL, the e-commerce arm and 100 per cent subsidiary of Spencer’s, reported a gross merchandise value or GMV – calculated before to the deduction of any fees or expenses – of ₹192 crore for the April to September period of FY22; a 237 per cent rise YoY, against ₹81 crore in H1FY21. Net loss during this period reduced to ₹2.2 crore; from ₹8.7 crore in the year-ago period.

Revenue from operations during the period stood at ₹13 crore; or a 550 per cent YoY jump, the company said in its quarterly investor presentation.

EBITDA losses were down to ₹1.2 crore during the period; against ₹8.3 crore.

According to Shashwat Goenka, Sector Head, Spencer’s Retail, the company continued to witness “a strong momentum” in its omnichannel business for the second quarter with “1.7x growth over last year” (Q2FY22 versus Q2FY21).

Improvement in Business

The easing of lockdown in the September quarter and increased operational hours saw Spencer's Retail improve its metrics.

On a consolidated basis (omnichannel, Nature’s Basket and Spencer’s all put together), the gross margin for H1FY22 improved to 20.8 per cent versus 20.4 per cent in the year-ago period. The EBITDA margins improved to 4.9 per cent against 0.2 per cent. An improvement in the non-food category mix, including the general merchandise and apparel, positively impacted margins during Q2FY22.

Gross sales per sq feet (consolidated), however, saw a slight decline at ₹15,100 (down 5 per cent YoY), while the trading area during H1FY22 improved to 1.47 million sq feet (up 5 per cent YoY). However, the company maintained that sequentially – Q1FY22 versus Q2FY22 – there has been a near 7 per cent improvement in gross sales per sq feet.

On a standalone basis, Spencer’s Retail – which operates 155-odd stores pan-India – reported near-flat revenues of ₹975 crore during H1FY22, while net loss during the period reduced significantly to ₹39 crore (from ₹83 crore). While gross margins saw a 0.3 percentage point improvement to 19.5 per cent; EBITDA margins returned to the positive at 4.4 per cent (from -0.6 per cent).

Natures Basket, the premium food-only retailer with 35 stores, was EBITDA positive. The EBITDA for the business stood at ₹14 crore, the company said in its investor presentation. While EBITDA to revenue remained unchanged at 8.8 per cent; gross margins saw an improvement by 260 basis points to 28.9 per cent, YoY. The profitability was driven by a better higher margin mix and sustained cost controls, the company said in its investor presentation.

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